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With the economy never far from anyone’s mind nowadays, private label continues to be a hot topic in the beauty industry—what consumers truly feel about private label versus national brands, and how private label brands are working to build their own brand fans.

Private label beauty brands can no longer rely on “Compare to ...” tactics. They need to be innovative and offer something besides a price break.

Value, however, is also often seen as a strong advantage.

Stay current with trends, regulations, quality packaging and ingredients, and all the factors that make a good beauty product continue to be vitally necessary to private label beauty product developers.

It’s a common sight on the packaging of the typical private label lotion or serum in the supermarket or the drugstore aisles: Under the product’s name, one often finds in small print, “Compare to [national brand].” Is this really a fair comparison, though? And are consumers buying into it?

The answer isn’t a simple one. Often, private label skin care items are quite comparable to the big-name brands, both in terms of ingredients and efficacy. However, consumers around the world appear to have mixed feelings on the matter. A recent report from consumer market research company Canadean indicated that, while 44% of U.K. shoppers believed private label and store brands are produced in the same factories, they’re less inclined to believe this when it comes to personal care and hair care. The findings were similar in the U.S.

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According to a 2012 study by The Integer Group, 65% of respondents stated that they prefer a brand name to a private label product in the health and beauty category. Says Craig Elston, senior vice president of Integer, “Categories that offer shoppers frequent innovations such as performance and variety, and categories where personal stakes are higher, are more difficult areas for private label products to compete.”

Elston is right—personal stakes are incredibly high to a consumer when it comes to skin care and beauty. However, many private label companies are rising to the challenge of offering high-performing and unique products—all at an affordable price point—and as a result, they’re staying competitive and luring in consumers.

Just As Good … Or Better?

The success of a private label beauty product doesn’t necessarily hinge on its ability to market itself as “just as good” as the national brand. Rather, it’s likely to perform if it’s exceptional in its own right.

In January 2013, a three-way partnership between Walmart, actress Drew Barrymore and private label beauty manufacturer Maesa was announced; together, they launched Flower, a line of exclusive, custom-formulated cosmetics. The portfolio includes 181 eye, lip, face and nail products, and has an average price of about $6.98 per SKU. Because Barrymore is an owner and the face of the brand, the budget that a traditional brand would spend on advertising went instead into the formulation of the products, giving them an edge over a typical mass market line. “Drew has brought her passion and knowledge of premium cosmetics to Flower,” says Petra Tucker-Moss, senior director of product development and marketing at Maesa. “Her firsthand knowledge of luxury cosmetics allowed us to collaborate and develop a makeup line that delivers on its promise of bringing premium quality makeup to mass.”

Likewise, Your Name Professional Products hasn’t earned its stellar reputation by copying its competitors—the company is a standout in its field because it focuses on high-quality formulations and keeping up with industry trends. Examples include the recently launched Skin Transforming Serum and Skin Transforming Foundation with SPF, available in 12 shades. “These hybrid formulas are a new synergistic approach, which allows integrating active skin care ingredients into skin care formulas that are efficaciously absorbed by the skin,” explains Brenda Gallagher, Your Name’s director of sales. “The synergy is that the serum compounds the skin care effects and benefits of how the foundation works on the skin. They are the dynamic duo. With these products, we are feeding the skin and making sure the cosmetics are as skin like as possible.”

Offering a wide variety of formulations to meet the ever-growing range of needs for customers is also key to a private label manufacturer’s success. “A private label lab like ours designs over 100 formulas per month, whereas the standard brand owner will launch only a handful of new formulas a year,” says Sundeep Gill, vice president of research and development for Sun Deep Cosmetics. “The private label manufacturer’s focus on innovation has to be very keen to feed the immense need for new product development.”

It’s Only Natural

For some private label lines, it’s their commitment to chemical-free formulations and the health of the consumer that makes them stand out among the competition. In late fall 2012, Walgreens launched Ology, its proprietary line of personal care and household goods, specifically made both affordable and free from harsh chemicals. Among the Ology offerings are paper products, a laundry detergent, adult shampoo and conditioner, and a lotion and two-in-one body wash for babies.

“Ology reflects our dedication to innovation; our constant drive to improve our customers’ quality of life; and our ongoing commitment to help people get, stay and live well,” said Joe Magnacca, who was president of daily living products and solutions for Walgreens at the time of the launch. The line is sold both in Walgreens and Duane Reade, and is also available online.

Certified by the USDA as an organic processor of personal care products, and also by the American National Standards Institute, Sun Deep Cosmetics prides itself on its commitment to organic beauty. “Sun Deep is actively investing in new product concepts and innovative raw materials that challenge and break the shackles of what natural products can do,” says Gill. “We work with many of the new, up-and-coming natural standards to help define what ‘natural’ really means.”

Further, Sun Deep is certified to manufacture products that carry the NSF Organic seal, which validates a product’s “Made with Organic Ingredients” claim.

Not Just Name Recognition

Often, the success of a private label beauty line comes down to the same thing that any national line relies on—the overall quality of the products. This will largely be the result of the experience and expertise of the private label manufacturer, which nowadays offers not only a turnkey operation, but a wealth of industry and consumer knowledge.

“Your Name is the prestige private label company, so we need to provide our clients with products the customers want and, most importantly, need,” says Gallagher. “We launched our ‘Change is Good’ campaign, where we made changes to our packaging and formulas that our customers wanted to see. We seek what they are looking for, and we deliver.”

Agrees Gill, “When you work with us, we bring decades of experience in the natural products field. Where most companies have just begun to dabble in natural and organic personal care, we have seen more than our share of successes in this tumultuous arena. Our great diversity in the market gives us the insight you need to create brand value.”

Lisa Doyle was formerly the associate editor of GCI magazine and is a freelance writer in the Chicago area. Her work has appeared in Skin Inc. magazine, Salon Today, America’s Best, Renew and Modern Salon.